Globus Medical (GMED)

Return on total capital

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	219,701	201,850	236,251	180,407	115,472
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	4,177,330	3,997,960	1,846,370	1,741,390	1,506,300
Return on total capital		5.26%	5.05%	12.80%	10.36%	7.67%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $219,701K ÷ ($—K + $4,177,330K)
= 5.26%

To analyze the trend in Globus Medical's return on total capital over the years provided, we observe the following:

1. Globus Medical's return on total capital has shown fluctuations during the period from December 31, 2020 to December 31, 2024. The return on total capital increased from 7.67% in 2020 to a peak of 12.80% in 2022, indicating an improvement in the company's efficiency in generating profits relative to its total capital employed.

2. However, there was a significant decline in the return on total capital in 2023 and 2024, dropping to 5.05% and 5.26%, respectively. This decrease suggests that Globus Medical may have faced challenges in effectively utilizing its total capital to generate returns during these years.

3. It is essential for investors and stakeholders to closely monitor the trend in return on total capital as it is a key indicator of a company's profitability and efficiency in deploying its capital resources. The fluctuations in this ratio highlight the importance of understanding the factors influencing the company's performance and the effectiveness of its capital allocation strategies.

In conclusion, while Globus Medical experienced fluctuations in its return on total capital over the years, it is crucial for the company to consistently evaluate and optimize its capital allocation to ensure sustainable profitability and value creation for its shareholders.